Commercial Bank Investment and Financial Health Review
Executive summary
Strategic Focus
Progress
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Net profit decreased by 5.0% to QAR 901.2m as compared to H1 2019
NIMs improved to 2.4% from 2.0% in H1 2019
Operating profit of QAR 1,527.2m, up by 17.9% as compared to H1 2019
Excellence in Leadership in the Middle East award from "Euromoney"
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Best Performing Bank in Qatar from "The Banker"
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Results
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Capital &
Funding
Reshaping
Loan Book
Provisioning
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Most Innovative Digital Bank and Best Mobile Banking Application from "International Finance Magazine"
Best Consumer Digital Bank in Qatar, Best Online Product Offering, Most Innovative Digital bank, Best Online Cash Management, Best Trade
Finance Service, Best Mobile Banking App, Best in Social Media Marketing and Service from "Global Finance Middle East"
Best Cash Management Bank in Qatar award for the third year in a row, and Best Transaction Banking service in Qatar from "The Asian Banker"
Best Retail Bank in Qatar award for the fourth year in a row and the Best Remittance Product and Service in Asia Pacific, Middle East and Africa
from "The Asian Banker"
CET1 and Total Capital Ratios increased to 11.5% and 17.3% respectively as compared to 11.0% and 16.3% at 30 June 2019
Total consolidated deposits increased by QAR 0.3bn, up 0.4% in H1 2020 v June 2019
Low cost deposits have increased by 11.4%, year-on-year
Consolidated loan book at QAR 87.0bn in H1 2020, up 1.5% v H1 2019.
To support our corporate customers and the economy, we have postponed loan installments and interest payments
Focus remains on re-shaping profile of the lending book, by diversifying risk across a range of sectors including decreasing real estate exposure and
increasing exposure to government and public sector. Government sector remains at 11% (excluding temporary Government overdraft), while real
estate and contracting sectors were down by 3% and 1%, respectively as compared to H1 2019
NPL ratio increased marginally to 5.0% in H1 2020 compared to 4.9% in H1 2019, while loan coverage ratio (including ECL) decreased to 90% as
compared to 96.2% in H1 2019
Gross provisions at QAR 530.9m is 3.5% higher than that of H1 2019. The provisions are higher mainly on account of higher ECL due to the COVID-
19 pandemic
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Cost of Risk reduced to 51bps compared with 100bps in H1 2019 due to strong recoveries
Costs
Subsidiaries
& Associates
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Consolidated Cost to Income ratio reduced from 29.9% to 23.5% (normalized ¹ 26.5%) and in Qatar from 26.6% to 19.2% (normalized ¹ 22.8%) by
increase in operating income and reduction of costs through digitisation, automation and productivity enhancements.
Decrease in staff costs is on account of IFRS 2 accounting for its share options granted to staff
Alternatifbank reported net profit of TL 66.7m (QAR 38.5m), down by 40.0% as compared to H1 2019 (on QAR basis)
NBO reported net profit of OMR 15.0m (CB's share QAR 49.6m), down by 40.7% as compared to H1 2019
UAB reported net loss of AED 208.9m (CB's share of QAR 82.8m), as compared to net profit of AED 35.8m in H1 2019
1Normalized numbers stripped off the impact of IFRS 2 and the underlying derivative income which result from the movement in the share price for the staff performance scheme,
so we can focus on the underlying trend
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